Hence, no charges or fine can be imposed if the investor decides to stop the plan in the middle. As an investor, one must understand that SIP is a voluntary investment. The time taken to cancel SIP may vary from one fund house to another. One can cancel or stop SIP temporarily or permanently through various methods. However, it is advisable not to stop or miss SIP instalments for more than two months, especially when the investor does not seek to cancel their SIP plan permanently. Therefore, one can miss or stop instalment temporarily. It is important to note that, if ‘stop payment’ or low balance is held for more than two months, the AMC will cancel the SIP. They can inform the bank once they want to redeem the plan and prepare the payment.They can provide a ‘stop payment’ instruction to the bank.In case the investor wants to pause their SIP temporarily, then they can consider the following steps. Therefore, stopping SIPs is not advisable. However, many investors do not think this way and stop their SIPs due to fear. To sum up, investing in mutual funds through SIP helps investors to mitigate the market risk and volatility to a great extent. For instance, one can pause their SIP for 2 or 3 months and again resume it after having sufficient money. However, one may or may not hold the expertise in a particular kind of fund investment strategy.Īdditionally, if the investor has a financial emergency and does not have enough money for the next SIP instalment, in such cases, investors can cancel or pause their mutual fund SIP. Usually, active investors track how the fund is managed and by whom. Thus, this may not match with the financial goal of the investor furthermore.Ī change in the fund manager may affect the mutual fund scheme’s style and performance. When there is a change in the objective of a mutual fund scheme or its asset allocation, this will affect its returns. Sometimes SIPs offer results in the long run and may revive after a bad phase. However, it is recommended that investors must talk to an expert like an investment adviser before terminating the mutual fund. When a SIP of a mutual fund scheme consistently performs poorly over a time. Usually, SIPs are suggested in equity funds. Thus, every mutual fund SIP fetches more units to the investor when the NAV goes down. When the markets turn weak, NAV of funds also goes down.
Hence, they decide to stop their SIP and sell their mutual funds units when the scheme performs poorly. Many investors are panicked when the markets are fluctuating or falling. There are many reasons why an investor can cancel or pause their SIP in between the tenure. Why do investors cancel or pause their SIP in between the tenure? This will help in building a considerable corpus. When the markets go down, the NAV goes down and thus fetching more units to the investors. Hence, an investor shouldn’t stop their SIP when the markets are turning weak. The feature of rupee cost averaging in SIP helps investors to protect their investments from market fluctuations. Furthermore, they can stop SIP whenever they wish to.
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When an investor invests via SIP, they are free to decide the amount to be invested, the interval, and the instalment frequency. SIP is a pocket-friendly way of saving money.
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